The IAG share price is nearing its all-time high, continuing an uptrend that started in April when it was trading at 206p. It has jumped by over 107%, making it one of the top gainers in the FTSE 100 Index.
IAG share price jumps after European airline earnings
IAG, the parent company of top companies like British Airways and Aer Lingus, has done well this week as investors waited for its upcoming earnings on Friday.
There are signs that the company will publish strong earnings after some of its competitors released encouraging earnings recently.
Ryanair, the biggest budget airline in Europe, released strong numbers in the second quarter. It passenger count rose to 61.2 million, up by 2% to 59.8 million, while its load factor rose to 96% from the previous 95%.
Its revenue jumped to €5.48 billion, up by 8% in the same period last year. The results showed that the profit after tax (PAT) rose by 20% to over €1.72 billion.
Other European airline companies released strong numbers. For example, Lufthansa, the biggest German airline, published strong financial results. Its revenue rose to €29.5 billion in the first nine months of the year, up from the previous €28.1 billion.
The company’s profitability also continued soaring this year. Its operating income rose to over €31 billion, while the net profit rose by 32% to €1.09 billion.
Other companies like KLM have also done well in the past few months. KLM Group’s revenue rose by 6.2% to €8.4 billion, while its operating profit jumped by €223 million YoY to over €736 million.
IAG earnings ahead
The next important catalyst for the IAG share price will be its earnings, which will come out on Friday this week. As such, based on the recent results by its rivals, there are chances that its numbers will also be strong.
Its most recent results showed that its first-half revenue rose by 8% to €15.9 billion as its growth accelerated across its business.
IAG’s operating profit rose by 43% to €1.8 billion in the year’s first half and by 35% in the second quarter. Most importantly, the management pledged to continuing their margin expansion and returns to shareholders.
The average estimate among 22 analysts is that the company’s operating result will be about €2.09 billion, a big increase from what it made last year.
IAG is benefiting from the strong results in its transatlantic route, where it has a good market share. It is also seeing robust demand in the Latin American route.
IAG stock price technical analysis
The daily timeframe chart shows that the IAG stock price has been in a strong uptrend in the past few months. It has moved above the important resistance level at 416p, its highest level on October 8.
The stock has remained above the 50-day and 100-day Exponential Moving Averages (EMA). It has remained above the Ichimoku Cloud and the Supertrend indicators.
Therefore, the most likely scenario is where the stock continues rising as bulls target the all-time high at 441p. A move above that level will point to more gains, potentially to 500p in the long term.
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